Which of the following will cause a decrease in producer surplus?
A)the imposition of a binding price ceiling in the market
B)an increase in the number of buyers of the good
C)income increases and buyers consider the good to be normal
D)the price of a complement decreases

Question

Quizplus · Accepted Answer

When a binding price ceiling is imposed in the market, the maximum price that producers can charge for their goods is limited. This means that producers are no longer able to charge the higher price that they were charging before, resulting in a decrease in their producer surplus.

Which of the Following Will Cause a Decrease in Producer